Kelly Subcommittee to Address OCC Pre-emption

January 21, 2004

The House Financial Services Subcommittee on Oversight and Investigations, chaired by Rep. Sue Kelly (NY), will hold a hearing at 10 a.m. on Wednesday, Jan. 28, in room 2128 Rayburn on recently issued regulations by the Office of the Comptroller of the Currency (OCC) to pre-empt state laws that apply to national banks and to restrict the authority of state or other agencies to examine or take actions against national banks.

The rules issued by the OCC on Jan. 7 identified the types of state laws pre-empted for nationally chartered banks. State laws pre-empted include those that regulate loan terms, lending and deposit relationships, and those that create impediments for national banks to exercise powers granted to them under Federal law. The rule also creates new requirements for the prevention of predatory lending by nationally chartered banks.

"This hearing will require the OCC to publicly justify its decision to finalize these rules prior to congressional review," said Kelly. "It also provides all stakeholders the opportunity to share their input on the new rules so that we can ensure that this significant change to banking regulation does not undermine protections for consumers."

The rules will nullify a host of state consumer lending laws, including recent predatory lending legislation approved by the State of New York.

The Subcommittee will examine the OCC's two regulations and will receive testimony on the lasting impact the decisions will have on consumers across the country.

"I am disappointed in the manner in which these rules were finalized," explained Kelly. "Comptroller Hawke has personally promised me that he will visit the Subcommittee in late March as part of the Subcommittee's continuing oversight of the agencies within its jurisdiction."